Does the president of the United States have the power to set tariff rates unilaterally on all goods and services imported from any and every country on the planet for an infinite amount of time without any meaningful oversight from Congress or courts of law?
That is the question the Supreme Court heard Wednesday, and it appears a solid 6-3 majority of the justices will give the answer “No,” thus ending President Donald Trump’s reciprocal tariff regime.
On April 2, Trump triggered a global market crash when he announced sweeping tariffs of 10% to 49% on imported goods from every nation. Businesses across the country forced to pay these taxes quickly sued, and their claims were consolidated into one case tried before the U.S. Court of International Trade. In May, the CIT found that Trump lacked legal authority to implement the tariffs, and in August, an 11-judge panel of the U.S. Court of Appeals for the Federal Circuit agreed.
Article 1, Section 8 of the Constitution grants Congress, not the president, exclusive power to “lay and collect Taxes, Duties, Imposts and Excises” and to “regulate Commerce with foreign Nations.” The Supreme Court has held in the past that Congress may delegate these powers to the Executive Branch, and Congress has done so many times, including with the 1974 Trade Act, which authorized the president to deal with trade imbalances by instituting tariffs of up to 15% for a maximum of 150 days.
But never has Congress explicitly granted the president the power to tariff all countries, for any reason, at any rate, for any amount of time, as Trump now claims the International Emergency Economic Powers Act of 1977 does.
As outlandish as Trump’s claim that the IEEP grants presidents an infinite tariff power, it does seem that three members of the Supreme Court — Justices Samuel Alito, Brett Kavanaugh, and Clarence Thomas — seemed ready to say that the IEEP did that. The text of the statute does empower the president to “regulate” any “property in which any foreign country or a national thereof has any interest” to “deal with any unusual and extraordinary threat” to “the national security, foreign policy or economy of the United States.”
Trump claims that the U.S. is in a “large and persistent annual U.S. goods trade deficit” emergency that began in 1975, two years before the IEEP became law. Solicitor General John Sauer argued before the court that the power to “regulate” includes the power to implement tariffs.
Justice Amy Comey Barrett seemed not to agree. “Can you point to any other place in the code, or any other time in history where that phrase together, ‘regulate importation,’ has been used to confer tariff-imposing authority?” she asked.
Sauer responded by noting that President Richard Nixon used the Trading with the Enemy Act of 1917 to implement a 10% tariff on all imported goods, but the IEEP was written to overturn the TWEA in direct response to Nixon’s use of the statute to implement a tariff. In other words, it was passed for the express purpose of making clear Congress had not delegated its tariff authority to the president.
Chief Justice John Roberts seemed equally dubious of Sauer’s argument, invoking the Supreme Court’s recent “major questions doctrine,” which holds that when the executive branch is asserting that a statute grants it broad-reaching powers, the statute in question must contain a “clear statement” of the power being asserted by the executive branch. There is no “clear statement” that the president may implement tariffs anywhere in the IEEPA, and the power to tax is “of vast economic and political significance,” Roberts said.
Justice Gorsuch delivered the knockout blow to Sauer, asking him point-blank if, under Trump’s reading of the law, a future Democratic president could declare a climate change emergency and implement a 50% tariff on gasoline-powered cars. Sauer agreed that if Trump’s “Liberation Day” tariffs were legal, then a future president could impose tariffs on any product at any rate to combat climate change.
“Congress, as a practical matter, can’t get this power back once it’s handed it over.” Gorsuch continued. “The president is a one-way ratchet to the gradual but continual accretion of power in the executive branch and away from the people’s elected representatives.”
EDITORIAL: VOTERS SEND TRUMP A COURSE CORRECTION MESSAGE
Gorsuch is right. If the Supreme Court upholds Trump’s tariffs, it would be a major defeat for the separation of powers and the end of the court’s “major questions doctrine.”
Trump’s unilateral tariff regime has raised more than $100 billion in revenue for the Treasury Department, but it has also delivered higher prices and economic chaos to consumers, retailers, and manufacturers. If the Supreme Court strikes them down, Trump should take the prudent step of abandoning them altogether and restoring much-needed stability and tax relief to the public.